Harworth nearly triples revenue in ‘strong’ half-year period

Harworth Group, the brownfield land and property developer and investor, has nearly tripled its revenue in a half-year it has already completed, exchanged or agreed 70% of the firm’s budgeted annual sales.

The listed Rotherham-headquartered businesses said saw revenue jump from £21.9m in the six months to 30 June 2018 to £58.5m in the six month to 30 June 2019. Pre-tax profit also soared, from £6.6m to £18.4m.

Harwoth said more than 70% of budgeted sales for the full year had already been completed, exchanged or agreed. It said this reflected the underlying strength of the “beds and sheds” markets in Harworth’s core regions and its “commitment to place-making.”

The deals in the period include 76 acres of engineered residential land sold, with the total above book value, to national and regional housebuilders across four sites for £45.6m, which is projected to deliver 1,091 new homes.

Commercial sales at Gateway 45 Leeds, the firm’s 50/50 joint venture with Evans Property Group, saw sales of £30.3m (£15.2m Harworth share). This includes 10 acres of fully serviced commercial land sold to Leeds University; 2.5 acres sold to Leeds City Council for an extension to its existing park and ride facility; and contracts exchanged with PLP UK Logistics Venture (UKLV) for the sale of 43 acres at Gateway 45 to deliver 855k sq ft of speculative distribution space.

The firm declared that the interim dividend per share increased by 9.4% to 0.304p (H1 2018: 0.278p).

Harworth’s Chief Executive, Owen Michaelson, said: “Harworth has made good progress against its strategic priorities, benefiting from our focus on placemaking to capitalise on the continued strength of our regional markets.  Demand for consented land in our core markets remains strong, with land for 1,091 residential plots sold alongside the completion or exchange of a further 55 acres for commercial development.  Proceeds from these sales will be reinvested into the wider portfolio for ongoing site remediation and infrastructure works, alongside new strategic land and income-producing acquisitions.

“The appointment of Ian Ball as our first Chief Operating Officer, who has oversight of our new regional teams in the North West, Midlands and Yorkshire & Central, was the latest evolution of our business model that has already begun to deliver results.  Six sites were purchased in our core regions, comprising a mix of strategic land and income producing opportunities, for a total consideration including costs of £18.8m.  Alongside this we have continued to refine the portfolio, with the disposal of a further 1,400 acres of agricultural and former surface mining land with little development potential, allowing us to focus management time on the highest value-add opportunities.

“The May local elections, which resulted in the change of political control of some local authorities, is delaying the determination of a handful of our live outline planning applications and has prompted changes to the planning strategy for a small number of sites within our pipeline.  We are confident that these are short-term headwinds and I expect that our carefully considered applications, our track record and our expertise in delivering high-quality regeneration schemes will overcome these hurdles.

“As in previous years, our overall performance remains weighted towards the second half.  As things stand, we expect year-end performance to be broadly in line with the Board’s expectations, but local political volatility now creates greater uncertainty surrounding the timing of certain value gains than existed previously.

“We remain confident in the Group’s strategy both to replenish our strategic landbank and to grow the value of our underlying land and property portfolio, supported by low gearing, substantial financial headroom and the cultivation of new relationships by our regional teams in the North West, Midlands and Yorkshire & Central.  The resilient outlook of the residential and commercial markets in our core regions also supports our aim to maintain our above market average total return to shareholders across the cycle.”